LIC Housing Finance Q1 Review – Weak Asset Quality Outweighs Multiple Other Positives: Nirmal Bang

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LIC Housing Finance Ltd. reported weak results for Q1 FY22, with its profit after tax dropping by 81% YoY on account of net interest margin compression, one-off employee expenses (Rs 1.25 billion) and increase in provisioning.

High stress levels continue to keep us uncomfortable.

Along with sticky project level non performing assets, we have also seen a sharp deterioration in the retail segment’s asset quality.

The management expects collections to improve going forward. Our discomfort around provisioning levels remains unchanged.

Overall loan book growth was 10.8% YoY on the back of disbursements rising by 143% YoY.

In view of the strong demand trends for housing finance, LIC Housing Finance’s low cost of funds positions the company competitively.

Click on the attachment to read the full report:

Nirmal Bang LIC Housing Finance-Q1FY22 Result Update .pdf


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